WE ARE CTA

325,000 MEMBERS STRONG

Volume 16 Issue 7
April 2012

Proposal increases retirement age

By Dina Martin

After nearly 34 years teaching students with moderate to severe disabilities, Ukiah special education teacher Deanna Willson looks forward to retiring someday soon. She can’t imagine having to wait until she’s 67 to do it.

Under Gov. Jerry Brown’s pension reform plan, however, 67 would be the new retirement age for public employees in non-safety positions — employees like teachers and education support professionals.

Although the proposal won’t affect Willson’s retirement plans, she still can’t fathom it for her or for newly recruited teachers. “When you’ve been doing this for 34 or 35 years, there’s a lot of wear and tear on the body,” she says. “I haven’t had to lift kids for a few years, but I’m always bending up and down, pushing wheelchairs, helping them go to the toilet and assisting them with eating. I think it would be difficult to do my job after age 60, and I’m in good shape.”

Increasing the retirement age of public employees is one of several proposals the governor recommended in his pension reform package of last fall. CTA is working to improve the plan before it is voted on by the Legislature.

Talk to almost any educator these days, and they will scoff at the idea of raising their retirement age to 67.

“This is an extremely physical job,” says Rebecca Margolis, a member of the Southwest Teachers Association in San Diego and, like Willson, a special education teacher. Margolis works with students with mild to moderate disabilities, some with autism and behavioral issues.

Education support professionals like Robert Hill, a carpenter and member of the Ventura Classified Employees Association, also see no rhyme or reason to the governor’s proposal. Hill says the majority of ESP begin their job as second careers and can only expect to receive a pension of $1,400 to $1,600 a month when they retire.

“They’re talking about raising the retirement age to 67? When the average lifespan of a male in this country is 74, that would give me six to seven years to enjoy retirement,” he says.

Although the governor says that raising the retirement age will reduce the amount of time retirement benefits must be paid, there are other variables to consider. During a February Senate hearing, Ed Derman, deputy chief executive officer of the California State Teachers’ Retirement System, testified that by making CalSTRS members work longer, the government can expect to see increased health care costs and disability benefits for older workers, which could offset savings the government might expect.

Solving the issue — or creating a new one?
More importantly for CalSTRS members, under the governor’s proposal in which two-thirds of their CalSTRS benefit would come from a revised defined benefit (pension) and one-third from a 401(k)-type plan, members will experience a significant reduction in their standard of living.

Derman testified that employees who spend a full 35 years in their career and retire at age 67 can expect an 18 percent reduction in retirement benefits under the governor’s proposal. But employees who retire before age 67 would have their benefits reduced 40 percent and would receive just 35 percent of their final salary at retirement, rather than the 62 percent they would currently receive.

“Remember that CalSTRS members don’t receive Social Security,” Derman told the committee. “Essentially, that’s it. And it’s way below what a person could possibly expect to retire and maintain their standard of living.”

Raising the retirement age can have other impacts as well. Some, like Maggie Ellis, chair of State Council’s Retirement Committee, question whether raising the retirement age will skew the age of the entire teaching force. Those teachers will be at the top of the salary schedule, which could also cause financial headaches for school districts.

“We want to create a natural attrition, where younger teachers replace those who are about to retire. But with this, we create older and older teachers,” said Ellis. “Are we really solving the issue, or creating a new one?”

The governor also didn’t consider the contributions California’s retired teachers make to their local communities and the local economies. Not only do they contribute more than $34.5 billion in economic output to the state each year, but retired teachers are the backbone of many communities, volunteering in community organizations, in schools, and on local boards. As one observer wryly pointed out, “Who do they think run the polls on Election Day?”